Weak results sour views of US economy

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US stocks ended lower for a second day yesterday as investors soured on another round of underwhelming corporate results and the Federal Reserve said it would stick to its stimulus plan until the job market improves.

The S&P 500 has lost 3.6 per cent over the past five sessions, hurt by weak earnings outlooks and top-line revenue misses from large multinational companies. The index is now down 3.9 per cent from its closing high of 1,465.77 set on 14 September.

Boeing bucked the trend with a more optimistic outlook, but it could not break away from the rest of the market as it was pulled into negative territory in the afternoon. Shares of the defense and aerospace company, a Dow component, fell 0.2 per cent to $72.71.

The Fed, in its latest policy statement, said it would keep buying $40bn in mortgage-backed debt per month to keep interest rates low until the job picture gets better.

The Dow Jones industrial average shed 25.19 points, or 0.19 per cent, to close at 13,077.34. The Standard & Poor’s 500 Index dropped 4.36 points, or 0.31 per cent, to 1,408.75. The Nasdaq Composite Index slipped 8.77 points, or 0.29 per cent, to end at 2,981.70.

After the close, shares of Best Buy slid 6.9 per cent to $15.75 after the No. 1 US electonics chain warned that its fiscal third-quarter earnings and same-store sales would fall. Best Buy closed the regular session at $16.92, up 0.3 per cent. But shares of online game maker Zynga jumped 12.7 per cent to $2.40 after the bell after the company raised the lower end of its 2012 earnings outlook.